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Bill George

Harvard Business School Professor, former Medtronic CEO

Leadership Kudos and Gaffes: President Obama leading this week on foreign policy

Leadership Kudos this week go to President Barack Obama, who had “a very good week.” Obama’s steady head about foreign policy – tough-minded but cool – and the tireless efforts of Secretary of State Hillary Clinton are showing consistent results. The latest was the ultimate success of Obama’s policy in Libya that paid off when strongman Colonel Moamar Gaddafi was killed in Thursday’s shootout. On Friday the President announced the end of U.S. engagement in Iraq with all troops slated to come home by the end of the year, a peaceful end to nine years of bloodshed. These successes add to his support of the Arab Spring and the liberation of Egypt and mounting signals that he would like to move away from involvement in Afghanistan. Meanwhile, the President is being very tough with the Pakistanis and holding off Iran’s advances in the Middle East. Finally, he signed at long last three free trade bills with South Korea, Columbia, and Panama that will give a boost to the economy, in spite of opposition from his own party.

Leadership Gaffes go to Abbott Labs and its CEO Miles White for breaking up a great health care company by spinning off Abbott’s $18 billion pharmaceutical business in search of “unlocking shareholder value.” In his 12 years as Abbott’s CEO, White has done a good job in moving the company into medical devices and expanding its revenues in all its businesses. It is hard to see how any sustainable economic value will be created by this bit of financial engineering. Abbott’s move seems intended to mask the reality that the company has been unable to fulfill its mission of discovering drugs and is facing the loss of patent protection on its leading drug. To its credit Abbott has followed a broad health care strategy similar to Johnson & Johnson and Novartis, but the latter two firmly believe their breadth and impact on health care are well served by their strategies. After decades of success, why shift to chasing short-term shareholder value?